Central Bank of Iraq – The Great Bank Robbery
Originally published at:
http://www.centralbanking.com/newsmakers/archive/2003/may12.htm
12 May 2003
The Great Bank Robbery
Forget the looters that ran loose in Iraq after the war. In one fell swoop, Saddam Hussein has put those small-timers to shame by single-handedly snatching double the amount of cash that it took the lot of them three weeks to scavenge. It could even have been the greatest bank heist of all time: after all, $1 billion is no paltry sum. But the brazen nature of it is what is so startling. Not for Saddam any of these fancy hi-tech hacking devices you see in the movies, no need for any of that. A good old-fashioned tractor-trailer combo seems to have done the trick perfectly.
A senior Iraqi official, who remains anonymous on account of his personal safety, told the New York Times that Saddam successfully executed the summary removal of three tractor loads worth of cash from the central bank’s coffers. On the eve of the first Baghdad bombings, on March 18, a gang of complicitous minions spent two hours relieving the central bank of what amounted to about a quarter of its foreign exchange reserves. Saddam allegedly entrusted the job to his second son, Qusay, and his own personal assistant, Abid al-Hamid Mahmood, who piled the trailers with $900 million worth of $100 bills and $100 million worth of euros before the bank opened.
They may have been last sighted, according to a colonel in the US special forces, trundling across Iraq’s border with Syria, although he was unable to confirm the exact contents of the trailers, or whether they were in fact the same ones. Others allege that the hoards of cash discovered in Saddam’s now conquered palaces could account for much of what was taken from the central bank, with as much as $650 million found in one. Meanwhile, Diyaa Habib al-Khayoun, general manager of the state-owned al-Rafidain Bank, upheld to United Press International that $250 million and 18 billion Iraqi dinars were pinched from the bank, but by professional thieves, and it was nothing to do with Saddam.
Whatever the case, it is not known what effect this will have on the Iraqi economy, and anyway Iraqi central bankers may have more pressing things to worry about. For starters, finding a place to work: the elegant building that used to house them lies in smithereens, described by the Associated Press as a “burned out husk”, with all nine floors levelled to the ground. Although trumped royally by Saddam, looters, armed with acetylene torches and rocket-propelled grenades, seem to have done a pretty good job at trashing the place. Still, according to Humam Shamaa, an Iraqi economist at the University of Baghdad, operations could resume in another location as “the staff is ready to return if there is security”.
Then the central bank has the introduction of a new currency to be thinking about, although it may be that the US Treasury has done quite a bit of the thinking for them. The $1.7 billion in Iraqi funds seized from US banks is being used to pay civil servants, but US officials say it could be another three to six months until a new currency is issued, once a new government is formed. There is no doubt that the Saddam dinar, the currency most widely in use before the war, has had its day. But although there have been ritual burnings of these worthless notes in Iraq, ironically they are selling like hotcakes on online auction sites like eBay – at intriguingly inflated prices: http://listings.ebay.com/pool1/plistings/list/all/category3411/index.html?from=R4.
As for Saddam’s super swipe on the central bank, well, you could forgive him. Frankly, anyone else with that kind of cast-iron grip over his central bank would have been eccentric not to do the same. As the New York Times informant put it, “When you get an order from Saddam Hussein, you do not discuss it.” Governments the world over may be seething with envy at the kind of sway Saddam had over his central bank. But happily, as far as Newsmakers knows, his position was fairly unique.
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